There are no benefits to be had from a weak dollar. None. To suggest there are is the equivalent of saying a basketball player benefits from a shrinking inch and foot that will make him taller in shorter feet and inches. Reality always intrudes.
What's true about length is true about money precisely because money is nothing more than a measure. Keep the previous truth in mind as economists and confused Trump administration officials like Steven Miran (Chairman of Trump's Council of Economic Advisors, plus Fed official) claim that a weak dollar makes U.S. exports more competitive. Utter nonsense.
If we ignore that the sole purpose of exporting is to improve oneself with imports, we can't ignore that a shrunken dollar in no way enhances U.S. competitiveness globally. That's because every product in the world is an effect of intensely sophisticated global cooperation. Think Apple iPhones, Boeing airplanes, and Ford automobiles: all three achieve globally desirable product status only insofar as imported inputs from all over the world inform their creation. Which means that if the dollar is in decline, the cost of imported inputs essential to U.S. exporting increases.
Much more important than imported inputs to global competitiveness is investment. Investment is just another word for relentlessly improving production processes so that more and more goods and services can be produced at lower and lower prices. Consider the latter with the dollar's decline (in the constant that is gold, a dollar that purchased 1/260th of a gold ounce in 2001 now purchases 1/3700th of an ounce) top of mind: when investors put dollars to work, they're trying to achieve a return in dollars that is a multiple of the initial dollars invested. Which means the dollar devaluation that Trump is blithely unaware of (or perhaps cheering) exists as a tax on global competitiveness.
No doubt some will say that the Trump economy is booming, or at least doing well, but it's the American norm to boom. A bad day in the U.S. is a roaring day defined by powerful growth anywhere else. Put another way, to be good or even great in the U.S. is not enough. Which means the better way to assess the Trump economy is in terms of the growth we could be having if a falling dollar versus gold and foreign currencies weren't causing those with precious capital to hide some of their wealth in inflation hedges (hard assets representing wealth that already exists like gold, art, land, rare stamps, etc.) over investment in new ideas that, if successful, lead to the creation of immense amounts of new wealth.
What's notable about what you're reading and perhaps cause for optimism is that there are individuals close to Trump who are well aware of the singular importance of a strong, stable dollar. Think Larry Kudlow. Traveling back in time to Bill Clinton's presidency, Kudlow crossed the aisle to cheer the Clinton Treasury's support of a strong dollar as a major factor in the Clinton boom.
Which means Kudlow knows well why the Trump economy isn't growing in the way it could, or should. It's so basic. Investment drives economic growth, and a strong, stable dollar removes a very real risk factor from the act of putting money to work.
Kudlow owes it to Trump and Treasury secretary Scott Bessent to remind them of the importance of a trusted dollar. Trump's base elected him with economic progress top of mind, plus those same Trump voters earn dollars. Get it? Kudlow surely does, and owes it to Trump and Bessent to make sure they get it.
